The Estonian competition authority has conducted a brief analysis revealing significant market failures in the packaging waste collection and recycling sector, indicating a need for systemic changes. According to Kristin Truus, a lawyer at the authority, 96% of packaging producers in Estonia have delegated their extended producer responsibility obligations to recycling organizations, necessitating a reform to address competition barriers.

The analysis identified several obstacles to competition, including barriers to entry for new recycling organizations and access to packaging waste. It also highlighted deficiencies in the procurement of services related to waste management, such as low competition, lack of transparency, and legal preferences for certain waste handlers in the bidding process. Additionally, risks associated with vertical integration and conflicts of interest were noted, particularly when recycling organizations have close legal and economic ties to specific waste handlers.

Furthermore, the analysis pointed out risks arising from the consolidation of waste collection rights under a single waste handler, which could negatively impact competition. Ongoing issues with the availability and quality of waste data, as well as a lack of transparency in the distribution of packaging waste among recycling organizations, were also raised.

In light of these findings, the competition authority has made several recommendations to improve the competitive landscape, including proposals for amendments to the packaging law as part of the ongoing waste reform. The aim is to lower barriers for new recycling organizations, enhance transparency in the selection process for waste handlers, and ensure competition and transparency in the collection and transfer of packaging waste.

The authority also initiated a national oversight procedure to investigate potential abuses of a dominant market position concerning the treatment of packaging waste collected through a specific waste handler. This analysis was conducted in the first half of 2025 to clarify the operational principles of the system and identify possible competition barriers, contributing to the promotion of a competitive environment through waste reform.